Efficient Organizational Design: Balancing Incentives and Power

✍ Scribed by Marco Weiss

• Publisher: Palgrave Macmillan
• Year: 2007
• Tongue: English
• Leaves: 342
• Edition: First Edition
• Category: Library

✦ Synopsis

Good organizational design provides incentives for value generation and determines an efficient power distribution in organizations. This book investigates both theoretically and practically how organizations can be designed for efficiency. The different building blocks of organizational design--the strategy, the structure, the boundaries, and the governance of organizations--are first analyzed for any interdependencies within or between them and then synthesised to a consistent system. Three case studies in the second part of the book illustrate the application of the theory of organizational design.

✦ Table of Contents

Cover......Page 1
Contents......Page 6
List of Figures......Page 10
List of Tables......Page 11
Foreword......Page 12
Preface......Page 16
1.1 Motivation......Page 20
1.2 Objectives......Page 24
1.3 Methodology......Page 26
1.4 Outline......Page 30
Part I: Theory of Organizational Design......Page 34
2.1 Theories of the firm......Page 36
The history of firms......Page 37
The existence of firms......Page 39
The boundaries of firms – transaction cost theory......Page 41
The structure of firms – agency theory......Page 44
The governance of firms – incomplete contract theory......Page 46
The firm as a knowledge-creating entity......Page 49
The firm as a system......Page 52
2.2 Configuration of systems......Page 55
Elements and systems......Page 56
Path dependencies......Page 61
Consistent configurations – application of the theory......Page 65
Defining value......Page 67
Measuring value......Page 69
Technological progress......Page 72
Regulation and liberalization......Page 75
Standard setting......Page 77
The financial system......Page 80
2.5 The inadequacy of traditional theories of the firm......Page 82
3.1 The strategy of the organization......Page 91
The purpose of the organization......Page 93
The market-based perspective......Page 95
The resource-based perspective......Page 99
The accounting-based perspective......Page 104
Construction and deconstruction of the value chain......Page 105
3.2 The boundaries of the organization......Page 108
Setting the boundaries......Page 109
Shifting the boundaries......Page 114
Blurring the boundaries......Page 118
3.3 The internal structure of the organization......Page 122
Information and knowledge......Page 124
Power and authority......Page 129
Incentives and motivation......Page 137
Co-ordination and co-operation......Page 146
3.4 The governance of the organization......Page 153
Specific investments, stakeholders and ownership......Page 155
The different constituencies......Page 158
Governance mechanisms......Page 164
Organizational forms......Page 170
4.1 Synthesis of the building blocks – designing for fit......Page 183
Taking stock......Page 184
Complementarities between the building blocks......Page 186
Configuration of business models......Page 193
4.2 Adaption to the environment – designing for change......Page 197
Constant change as a design feature......Page 198
Staying at the peak – continuous adjustments......Page 201
Switching peaks – radical adjustments......Page 206
4.3 Efficient organizational design......Page 211
Part II: Practice of Organizational Design......Page 214
5.1 Introduction......Page 216
5.2 Three concepts for evaluation......Page 221
Economies of the securities transaction value chain......Page 223
Vertical interdependencies in the value chain......Page 226
Regulation......Page 227
5.4 Strategic conduct – the provider’s action set......Page 228
Boundary decisions......Page 229
Communication standards and accessibility......Page 230
Interdependencies in the action set......Page 234
System 1 – Regulated monopoly......Page 237
System 2 – Competitive fragmentation......Page 239
System 3 – Contestable monopolies......Page 241
5.6 Comparative organizational analysis......Page 243
6.1 Introduction......Page 252
Deutsche Bank......Page 257
The co-operative banking group......Page 259
Deutsche Bank......Page 262
The co-operative banking group......Page 263
The narrow view of efficiency......Page 265
Differences in the designs......Page 266
Complementarities between the building blocks......Page 268
The broader view of efficiency......Page 269
7.1 Introduction......Page 273
7.2 The software industry......Page 280
The economics and technology of software production......Page 281
What is open-source software?......Page 283
Paradigms of innovation......Page 284
Organizational design of proprietary source firms......Page 286
Consistency and shortcomings......Page 289
7.4 The system of open-source software......Page 291
Organizational design of open-source projects......Page 292
Consistency and the open-source ecosystem......Page 297
Comparison of the organizational designs......Page 301
Efficient organizational design......Page 306
8 Conclusion......Page 312
Bibliography......Page 315
Index......Page 336